Introduction

Indian Railways is dependent largely on the market environment, mainly internal and external
factors. The effect of these factors are listed below:

External Macro environment

DEMOGRAPHICS

Demographics refers to the characteristics of the population, including factors such as size, distribution
and growth. Indian railways, in order to relieve the women passengers during rush hours has started
various “ladies special” trains such as those between delhi and palwal, Bandel and Howrah, Kalyani-
Sealdah, Panvel-Mumbai CST, etc . Matribhumi special trains have also been started for the women.

Various initiatives in this area include reduction of age limits for special concession to senior women
citizen from 65 to 60 years, concessional rates for the blind and mentally challenged persons for travel in
AC classes and Free second class Monthly Season Tickets (MSTs) for school going children upto tenth
standard for travel between home and school. Catering to the lower strata of the society, railways offer
low cost classes like Unreserved and Sleeper classes. It also offers special trains known as GaribRath
which gives cheap Air conditioned accommodation. Karmabhoomi trains to be introduced for migrant
labour

To handle the increasing number of commuters many new trains have been introduced on various
routes. Frequency of trains on local/short-distance routes has been increased to help the daily
commuters. Eg. 101 new suburban trains for Mumbai have been started this year.

ECONOMIC CONDITION

Inflation – Indian Railways had to cut freight rates for food grains to help tackle inflation. The reluctance
to raise freight rates is making railways turn to companies to build new tracks, stations, wagons, logistic
parks and high-speed train corridors.

Recession – At the time of recession, the freight traffic of Indian Railways continued to grow, albeit at
slow pace, indicating only marginal impact of the global recession on the Indian economy. The railways
have enhanced freight revenue by increasing its axle loading, improving customer services and adopting
an innovative pricing strategy. Also, passengers in order to spend less preferred to travel by railways
rather than by the airways.

COMPETITION

Road transport competes with the Indian Railways (IR) for transportation of all major commodities, with
roads having an edge in transportation of non-bulk commodities owing to point to point delivery with
railways commanding a higher share in transportation of bulk commodities. Over the years, roads have
gained an increasing preference vis-à-vis the railways and the share of road transport currently stands at
about 65%.
The Railways still face a stiff competition from the quality of the services offered at the airports, specially
affecting the segment of customers belonging to the elite class. But still whenever there is a sharp rise in
the air ticket rates the frequent travellers prefer railways to cut the cost of travelling and this results in
an increase of traffic for the railways.

Social and Cultural factors:

Since the quality, not the quantity is the need of the hour, Indian railway focuses on the quality of the
services provided. For instance, it has undertaken a pilot project of “Doctors on Duronto Trains”
considering the long term demand of doctors in long distance trains. Indian railways pay enough
weightage to the importance of time of passengers. It runs many services like superfast express trains,
Jan shadabdi Expresses, Rajdhani services etc, which run at an average of 70 km/hr , thereby making the
travel time shorter compared to many road transportation. It runs pilgrim and tourist services like
Bharat darsan, Buddhist train, Fairy Queen, Hill Charters, Deccan Odyssey to cater the needs of the
people.

Political and legal factors:

Indian Railway is constantly shaped by the alternate change of Union governments. Indian constitution
has provided special provision for Railways in its legislative wing as “Ministry of Railways”. All the
demands of the consumers are addressed in its biannual Budget policy, introduced by Union Railway
minister. Indian railways and all its activities are monitored by the Ministry of Railways and it abides by
all the laws and regulations.

Technological factors:

Indian Railways is one step ahead with respect to technological innovations. It has developed an online
platform for ticket reservation and booking (IRCTC website). It also installed e-ticketing Kiosks in
selected railway stations in India. It adopted latest signaling technology for ensuring passenger safety.

EXTERNAL MICROENVIRONMENT

The Indian Railways manufactures a lot of its rolling stock and heavy engineering components.
Production Units, the manufacturing plants of the Indian Railways, are managed directly by the ministry.
The General Managers of the PU’s like Central Organization For Railway Electrification, Chittaranjan
Locomotive Works, Diesel Locomotive Works, Rail Wheel Factory, Bharat Earth Movers Limited, etc.
report to the Railway Board.

CRIS (Center for Railway Information Systems), for Indian Railways, has developed fully secure and
completely user friendly Application System which will permit vendors to Search, View, Download
tenders directly from CRIS’s secure website and also participate and submit Online offers in the E-
tenders directly from the website .

IRCTC is in charge of catering services on trains and railway stations across India. Depending on the
distance covered by the train and average passenger load factor, the railways either equips trains with
their own pantry cars or provides meals at select stations en route.
SWOT ANALYSIS

Strengths Weaknesses Opportunities Threats

1. Subsidiary of 1. Lack of 1. Buoyancy in the 1.Econ o mi c
Ministry of motivation in Tourism Sector. Downturn
Railways employees 2. Increase in 2. Terrorists Attacks
2. Full back up by 2.Poor Individual disposable & Naxalites Attacks
the Govt. Promotional income 3. Withdrawal of
3.Excel lent activities & public 4. Booming Hotels & parental support from
Faith & Goodwill relation Resorts Industry the Ministry of
4. Monopoly in 3. Non existence of 5. Bids for Contract Railways, Govt. of
Rail tour packages full fledge (National & India
5. Cheapest, yet Marketing team International) 4. Air Packages &
best in Spiritual 4. Poor customer 6. Strategic Tie-ups Road Transport
Tour Package support services for better & Packages
Segment 5. P oor improved 5. Low fare Airlines
6. Unique products infrastructural performance. 6. Private Small Tour
like Mahaparinirvan facilities 7. Outbound Tourism operators
express, Bharat Segment 7. Increasing Inflation
darshan, Maharaja 8. Tie-ups with leading rate
Express Trains institutions &
7. LTC approved organizations for
Packages educational tours &
other tours at
National &
International
platform.
9. Booming Medical
Tourism

Internal environment

The Indian Railways has a capital base of about Rs. 100000 crores and is often referred to as the lifeline
of the Indian economy because of its predominance in transportation of bulk freight and long distance
passenger traffic.

Freight Business

The Railways are increasing their market share in both bulk and non-bulk freight traffic by improving the
quality of service with reduction in transit time and better reliability and availability. Both these efforts is
being continued further along with increased use of IT-enabled services for improving customer
interface.

Capacity Enhancement

Construction of Dedicated Freight Corridors separating freight traffic from passenger traffic on trunk
routes. The Golden Quadrilateral and the proposal for capacity augmentation through construction of
Dedicated Freight Corridors (DFCs) along the highly saturated freight lines is the new long-term strategy
to provide premium services in freight and passenger.

Technology Upgradation

An integrated Railway information is implemented to provide information of train movement, ticketing,

facilities on display systems on stations and trains, as well as through diversified media such as the
Internet, through telephones / mobile phones, television, radio and newspaper feeds, etc.

Energy

Adopting environmental friendly measures by use of fuel-efficient locomotives, adopting energy-

efficient technologies for manufacturing and maintenance activities, reducing the electricity charges and
traction energy bill, and improving the fuel management in diesel locomotives.

Human Resources

The large human resource base has to keep pace with the rapid changes through appropriate re-skilling
and new recruitment policies so as to improve the ratio of the skilled workforce.

Resource Mobilisation

Indian Railways have shown the ability to generate substantial investible surpluses through dynamic
pricing policies, increased volumes and reduced unit costs of operations. Focus on higher internal
generation, increased public and public-private partnerships and generation of resources through
leveraging and commercial exploitation of its assets.

Management Information Systems – Indian Railways

The main problems before railways include: Increase operational efficiency by streamlining and
optimizing business procedures, make the information accessible and actionable and be adaptable to
changing. Indian Railways has identified IT as the means to turn railways into a competitive business
asset.
Management information systems has helped Railways so as improve freight revenue, passenger
revenue, and provided improved services by using the data stored in its databases. This meaningful
information can be used by managers so as to make resource allocation decisions.

CRIS and zonal MIS groups are responsible to implement these systems. PRS (Passenger Reservation
System) and CONCERT (Country Wide Network of Computerized Enhanced Reservation and Ticketing)
are examples of MIS systems that has helped railways to help railways reduce time to buy tickets so as
to increase convenience to consumers. PRS enquiry systems can keep track of all the real time locations
of trains across the country. This is achieved by connecting different zones to a central server. Railways
have started providing SMS and mobile booking services so as to add value to their product. Information
systems enables railways to optimize their routes and reduce vacant seats in a train by modifying train
timings and decide their pricing strategies. Customers can use this too, for generating reports regarding
specific trains and their timings. IRCTC is an example of convenience model which where-in railways
have responded to increase in competition from airways, roadways and so as to enable users to book
tickets online.

FOIS (Freight Operations Information System) is also an online real time system for management and
control of freight traffic. Rake management and terminal management services have automated the
entire logistics handling.